Unassociated Document


    EXECUTIVE EMPLOYMENT
AGREEMENT

     

    This
Executive Employment Agreement, dated August 6th, 2008
(the “Commencement
Date”), is between Sunburst Acquisitions III, Inc., a Colorado
corporation (the “Company”)  and
Richard McKilligan, an individual residing at 1226 North Laurel Avenue #208,
West Hollywood, California 90046 (“Executive”).

     

    1.
Position and Responsibilities

     

     (a) Position. Executive is
employed by the Company to render services to the Company in the positions of
Chief Financial Officer, Secretary and General Counsel.  Executive
shall perform such duties and responsibilities as are normally related to such
positions in accordance with the standards of the industry and any additional
duties now or hereafter assigned to Executive by the Company. Executive shall
abide by the rules, regulations, and practices as adopted or modified from time
to time in the Company’s sole discretion.

     

     (b) Other Activities.
Executive will not, during the term of this Agreement, (i) accept any
other employment, or (ii) engage, directly or indirectly, in any other business
activity (whether or not pursued for pecuniary advantage) that might create a
conflict of interest with the Company, provided, however, that Executive may,
after providing notice to the Company, accept other employment.  The
Company acknowledges that Executive has provided notice of Executive’s
employment with Derycz Scientific, Inc. and Bristol Capital Advisors,
LLC.

     

     (c) No Conflict. Executive
represents and warrants that Executive’s execution of this Agreement,
Executive’s employment with the Company, and the performance of Executive’s
proposed duties under this Agreement shall not violate any obligations Executive
may have to any other employer, person or entity, including any obligations with
respect to proprietary or confidential information of any other person or
entity.

     

     (d) Term. The term of
employment of Executive by the Company pursuant to this Employment Agreement
shall be for the period commencing on the Commencement Date and ending on August
8th,
2010, or such earlier date that Employee’s employment is terminated in
accordance with the provisions of this Employment Agreement.

    


    2.
Compensation and Benefits

     

     (a) Base Salary. In
consideration of the services to be rendered under this Agreement, the Company
shall pay Executive a salary at the rate of Thirty Thousand Dollars ($30,000)
per year (“Base
Salary”). The Base Salary shall be paid in accordance with the Company’s
regularly established payroll practice.  Executive’s Base Salary will
be reviewed from time to time in accordance with the established procedures of
the Company for adjusting salaries for similarly situated employees and may be
adjusted in the sole discretion of the Company.

     

    (b) Bonus. Executive shall be
eligible to receive bonuses at the discretion of the boards of directors of the
Company

    


    (c)
Options.  Executive will receive fully vested options to
purchase Fifty-Six Million Six Hundred Eighty-Two Thousand (56,682,000) shares
of the Company’s common stock at the price of $0.00001 per share, with an
expiration date of August 6th, 2013, as soon as practicable after sufficient
common shares have been authorized under the Company’s Articles of
Incorporation.

    


     (c) Benefits. Executive shall
be eligible to participate in the benefits made generally available by the
Company to its employees, in accordance with the benefit plans established by
the Company, and as may be amended from time to time in the Company’s sole
discretion.

     

    
      
         

      

      
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     (d) Expenses. The Company
shall reimburse Executive for reasonable business expenses incurred in the
performance of Executive’s duties hereunder in accordance with the Company’s
expense reimbursement guidelines.

    


    3.
At-Will Employment; Termination By the Company

     

     (a) At-Will Termination by the
Company. The employment of Executive shall be “at-will” at all
times.  The Company may terminate Executive’s employment with the
Company at any time, without any advance notice, for any reason or no reason at
all, notwithstanding anything to the contrary contained in or arising from any
statements, policies or practices of the Company relating to the employment,
discipline or termination of its employees.  Upon and after such
termination, all obligations of the Company under this Agreement shall cease,
unless Executive’s employment is terminated without Cause, in which case the
Company shall provide Executive with the severance benefits described in Section
3(b) below.

     

     (b) Severance. Except in
situations where the employment of Executive is terminated For Cause, By Death
or By Disability (as defined in Section 4 below), in the event that the Company
terminates the employment of Executive at any time, Executive will be eligible
to receive an amount equal to three (3) months of the then-current Base Salary
of the Executive payable in the form of salary
continuation.  Executive’s eligibility for severance is conditioned on
Executive having first signed a release agreement in the form attached as
Exhibit A.  Executive shall not be entitled to any severance payments
if Executive’s employment is terminated For Cause, By Death or By Disability (as
defined in Section 4 below) or if Executive’s employment is terminated by
Executive (in accordance with Section 5 below).

     

    4.
Other Terminations By the Company

     

    (a) Termination for Cause. For
purposes of this Agreement, “For Cause” shall
mean: (i) Executive commits a crime involving dishonesty, breach of trust, or
physical harm to any person; (ii) Executive willfully engages in conduct that is
in bad faith and materially injurious to the Company, including but not limited
to, misappropriation of trade secrets, fraud or embezzlement; (iii) Executive
commits a material breach of this Agreement, which breach is not cured within
twenty (20) days after written notice to Executive from the Company; (iv)
Executive willfully refuses to implement or follow a lawful policy or directive
of the Company, which breach is not cured within twenty (20) days after written
notice to Executive from the Company; or (v) Executive engages in misfeasance or
malfeasance demonstrated by a pattern of failure to perform job duties
diligently and professionally.  The Company may terminate Executive’s
employment For Cause at any time, without any advance notice.  The
Company shall pay to Executive all compensation to which Executive is entitled
up through the date of termination, subject to any other rights or remedies of
Employer under law; and thereafter all obligations of the Company under this
Agreement shall cease.

     

     (b) By Death. Executive’s
employment shall terminate automatically upon Executive’s death.  The
Company shall pay to Executive’s beneficiaries or estate, as appropriate, any
compensation then due and owing.  Thereafter all obligations of the
Company under this Agreement shall cease.  Nothing in this Section
shall affect any entitlement of Executive’s heirs or devisees to the benefits of
any life insurance plan or other applicable benefits.

     

     (c) By Disability. If
Executive becomes eligible for the Company’s long term disability benefits or
if, in the sole opinion of the Company, Executive is unable to carry out the
responsibilities and functions of the position held by Executive by reason of
any physical or mental impairment for more than ninety (90) consecutive days or
more than one hundred and twenty days (120) in any twelve-month period, then, to
the extent permitted by law, the Company may terminate Executive’s
employment.  The Company shall pay to Executive all compensation to
which Executive is entitled up through the date of termination, and thereafter
all obligations of the Company under this Agreement shall
cease.  Nothing in this Section shall affect Executive’s rights under
any disability plan in which Executive is a participant.

     

    
      
         

      

      
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    5.
At-Will Termination By Executive

     

     Executive
may terminate employment with the Company at any time for any reason or no
reason at all, upon four weeks’ advance written notice. During such notice
period Executive shall continue to diligently perform all of Executive’s duties
hereunder.  The Company shall have the option, in its sole discretion,
to make Executive’s termination effective at any time prior to the end of such
notice period as long as the Company pays Executive all compensation to which
Executive is entitled up through the last day of the four week notice period.
Thereafter all obligations of the Company shall cease.

     

    6.
Termination Obligations

     

     (a) Return of
Property.  Executive agrees that all property (including
without limitation all equipment, tangible proprietary information, documents,
records, notes, contracts and computer-generated materials) furnished to or
created or prepared by Executive incident to Executive’s employment belongs to
the Company and shall be promptly returned to the Company upon termination of
Executive’s employment.

     

     (b) Resignation and Cooperation.
Upon termination of Executive’s employment, Executive shall be deemed to
have resigned from all offices and directorships then held with the
Company.  Following any termination of employment, Executive shall
cooperate with the Company in the winding up of pending work on behalf of the
Company and the orderly transfer of work to other
employees.  Executive shall also cooperate with the Company in the
defense of any action brought by any third party against the Company that
relates to Executive’s employment by the Company.

     

     (c) Continuing Obligations.
Executive understands and agrees that Executive’s obligations under
Sections 6, 7, and 8 herein (including Exhibits B and C) shall survive the
termination of Executive’s employment for any reason and the termination of this
Agreement.

    


    7.
Inventions and Proprietary Information; Prohibition on Third Party
Information

     

     (a) Proprietary Information
Agreement. Executive agrees to sign and be bound by the terms of the
Proprietary Information and Inventions Agreement, which is attached as Exhibit B
(“Proprietary
Information Agreement”).

     

     (b) Non-Solicitation.
Executive acknowledges that because of Executive’s position in the
Company, Executive will have access to material intellectual property and
confidential information.  During the term of Executive’s employment
and for one year thereafter, in addition to Executive’s other obligations
hereunder or under the Proprietary Information Agreement, Executive shall not,
for Executive or any third party, directly or indirectly (i) divert or attempt
to divert from the Company any business of any kind, including without
limitation the solicitation of or interference with any of its customers,
clients, members, business partners or suppliers, or (ii) solicit or otherwise
induce any person employed by the Company to terminate his
employment.

    


    (c) Non-Disclosure of Third Party
Information. Executive represents and warrants and covenants that
Executive shall not disclose to the Company, or use, or induce the Company to
use, any proprietary information or trade secrets of others at any time,
including but not limited to any proprietary information or trade secrets of any
former employer, if any; and Executive acknowledges and agrees that any
violation of this provision shall be grounds for Executive’s immediate
termination For Cause and could subject Executive to substantial civil
liabilities and criminal penalties.  Executive further specifically
and expressly acknowledges that no officer or other employee or representative
of the Company has requested or instructed Executive to disclose or use any such
third party proprietary information or trade secrets.

     

    
      
         

      

      
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    8.
Arbitration

     

    a.
ARBITRATION. EXCEPT AS PROVIDED IN SECTION 8(b) BELOW,
EXECUTIVE  AGREES THAT ANY DISPUTE OR CONTROVERSY ARISING OUT OF,
RELATING TO, OR CONCERNING ANY INTERPRETATION, CONSTRUCTION, PERFORMANCE OR
BREACH OF THIS AGREEMENT, SHALL BE SETTLED BY ARBITRATION TO BE HELD IN LOS
ANGELES COUNTY, CALIFORNIA, IN ACCORDANCE WITH THE RULES THEN IN EFFECT OF THE
AMERICAN ARBITRATION ASSOCIATION.  THE ARBITRATOR MAY GRANT
INJUNCTIONS OR OTHER RELIEF IN SUCH DISPUTE OR CONTROVERSY. THE DECISION OF THE
ARBITRATOR SHALL BE FINAL, CONCLUSIVE AND BINDING ON THE PARTIES TO THE
ARBITRATION. JUDGMENT MAY BE ENTERED ON THE ARBITRATOR'S DECISION IN ANY COURT
HAVING JURISDICTION. THE COMPANY SHALL PAY ALL OF THE COSTS AND EXPENSES OF SUCH
ARBITRATION, AND EACH OF THE COMPANY AND EXECUTIVE SHALL SEPARATELY PAY THEIR
COUNSEL FEES AND EXPENSES.

     

    THIS
ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE'S RIGHT TO A JURY TRIAL AND
RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE
EMPLOYER/EMPLOYEE RELATIONSHIP (EXCEPT AS PROVIDED IN SECTION 8(b) BELOW),
INCLUDING, BUT NOT LIMITED TO, THE FOLLOWING CLAIMS:

     

    i. ANY
AND ALL CLAIMS FOR WRONGFUL DISCHARGE OF EMPLOYMENT; BREACH OF CONTRACT, BOTH
EXPRESS AND IMPLIED; BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING, BOTH
EXPRESS AND IMPLIED; NEGLIGENT OR INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS;
NEGLIGENT OR INTENTIONAL MISREPRESENTATION; NEGLIGENT OR INTENTIONAL
INTERFERENCE WITH CONTRACT OR PROSPECTIVE ECONOMIC ADVANTAGE; AND
DEFAMATION;

     

    ii. ANY
AND ALL CLAIMS FOR VIOLATION OF ANY FEDERAL, STATE OR MUNICIPAL STATUTE,
INCLUDING, BUT NOT LIMITED TO, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, THE
CIVIL RIGHTS ACT OF 1991, THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, THE
AMERICANS WITH DISABILITIES ACT OF 1990, THE FAIR LABOR STANDARDS ACT, THE
CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, AND LABOR CODE SECTION 201, et
seq.;

     

    iii. ANY
AND ALL CLAIMS ARISING OUT OF ANY OTHER LAWS AND REGULATIONS RELATING TO
EMPLOYMENT OR EMPLOYMENT DISCRIMINATION.

     

    b.
EQUITABLE REMEDIES. EXECUTIVE AGREES THAT IT WOULD BE IMPOSSIBLE OR INADEQUATE
TO MEASURE AND CALCULATE THE COMPANY'S DAMAGES FROM ANY BREACH OF THE COVENANTS
SET FORTH IN SECTIONS 1 AND 7 HEREIN. ACCORDINGLY, EXECUTIVE AGREES THAT IF
EXECUTIVE BREACHES ANY OF SUCH SECTIONS, THE COMPANY WILL HAVE AVAILABLE, IN
ADDITION TO ANY OTHER RIGHT OR REMEDY AVAILABLE, THE RIGHT TO OBTAIN AN
INJUNCTION FROM A COURT OF COMPETENT JURISDICTION RESTRAINING SUCH BREACH OR
THREATENED BREACH AND TO SPECIFIC PERFORMANCE OF ANY SUCH PROVISION OF THIS
AGREEMENT. I FURTHER AGREE THAT NO BOND OR OTHER SECURITY SHALL BE REQUIRED IN
OBTAINING SUCH EQUITABLE RELIEF AND I HEREBY CONSENT TO THE ISSUANCE OF SUCH
INJUNCTION AND TO THE ORDERING OF SPECIFIC PERFORMANCE.

     

    
      
         

      

      
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    c.
CONSIDERATION. EXECUTIVE UNDERSTANDS THAT EACH PARTY'S PROMISE TO RESOLVE CLAIMS
BY ARBITRATION IN ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT, RATHER THAN
THROUGH THE COURTS, IS CONSIDERATION FOR THE OTHER PARTY'S LIKE PROMISE.
EXECUTIVE FURTHER UNDERSTANDS THAT EXECUTIVE IS OFFERED EMPLOYMENT IN
CONSIDERATION OF EXECUTIVE’S PROMISE TO ARBITRATE CLAIMS.

     

    9.
Amendments; Waivers; Remedies

     

    This
Agreement may not be amended or waived except by a writing approved by the Board
of Directors and signed by Executive and by a duly authorized representative of
the Company other than Executive. Failure to exercise any right under this
Agreement shall not constitute a waiver of such right. Any waiver of any breach
of this Agreement shall not operate as a waiver of any subsequent breaches. All
rights or remedies specified for a party herein shall be cumulative and in
addition to all other rights and remedies of the party hereunder or under
applicable law.

     

    10.
Assignment; Binding Effect

     

     (a) Assignment.  The
performance of Executive is personal hereunder, and Executive agrees that
Executive shall have no right to assign and shall not assign or purport to
assign any rights or obligations under this Agreement.  This Agreement
may be assigned or transferred by the Company; and nothing in this Agreement
shall prevent the consolidation, merger or sale of the Company or a sale of any
or all or substantially all of its assets.

     

     (b) Binding
Effect.  Subject to the foregoing restriction on assignment by
Executive, this Agreement shall inure to the benefit of and be binding upon each
of the parties; the affiliates, officers, directors, agents, successors and
assigns of the Company; and the heirs, devisees, spouses, legal representatives
and successors of Executive.

    


    11.
Notices

     

    All
notices or other communications required or permitted hereunder shall be made in
writing and shall be deemed to have been duly given if delivered:  (a)
by hand; (b) by a nationally recognized overnight courier service; or (c) by
United States first class registered or certified mail, return receipt
requested, to the principal address of the other party, as set forth
below.  The date of notice shall be deemed to be the earlier of (i)
actual receipt of notice by any permitted means, or (ii) two (2) business days
following dispatch by overnight delivery service or five (5) business days
following dispatch by the United States Mail.  Executive shall be
obligated to notify the Company in writing of any change in Executive’s
address.  Notice of change of address shall be effective only when
done in accordance with this paragraph.

     

    Company’s
Notice Address:

     

    Sunburst
Acquisitions III, Inc.

    c/o
Percipio Biotherapeutics, Inc.

    10990
Wilshire Boulevard, Suite 1410

    Los
Angeles, California  90024

    Attention:  General
Counsel

    
 

    Executive’s
Notice Address:

     

    Richard
McKilligan

    1226
North Laurel Avenue #208

    West
Hollywood, California  90046

     

    
      
         

      

      
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    12.
Severability

     

    If any
provision of this Agreement shall be held by a court or arbitrator to be
invalid, unenforceable, or void, such provision shall be enforced to the fullest
extent permitted by law, and the remainder of this Agreement shall remain in
full force and effect. In the event that the time period or scope of any
provision is declared by a court or arbitrator of competent jurisdiction to
exceed the maximum time period or scope that such court or arbitrator deems
enforceable, then such court or arbitrator shall reduce the time period or scope
to the maximum time period or scope permitted by law.

     

    13.
Taxes

     

    All
amounts paid under this Agreement (including, without limitation, Base Salary
and Severance) shall be paid less all applicable state and federal tax
withholdings and any other withholdings required by any applicable
jurisdiction.

     

    14.
Governing Law

     

    This
Agreement shall be governed by and construed in accordance with the laws of the
State of California.

     

    15.
Interpretation

     

    This
Agreement shall be construed as a whole, according to its fair meaning, and not
in favor of or against any party. Sections and section headings contained in
this Agreement are for reference purposes only, and shall not affect in any
manner the meaning or interpretation of this Agreement.  Whenever the
context requires, references to the singular shall include the plural and the
plural the singular.

     

    16.
Obligations Survive Termination of Employment

     

    Executive
agrees that any and all of Executive’s obligations under this Agreement,
including but not limited to Exhibits B and C, shall survive the termination of
employment and the termination of this Agreement.

     

    17.
Counterparts

     

    This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original of this Agreement, but all of which together shall constitute
one and the same instrument.

    


    18.
Authority

    


    Each
party represents and warrants that such party has the right, power and authority
to enter into and execute this Agreement and to perform and discharge all of the
obligations hereunder; and that this Agreement constitutes the valid and legally
binding agreement and obligation of such party and is enforceable in accordance
with its terms.

    


    19.
Entire Agreement

     

    This
Agreement is intended to be the final, complete, and exclusive statement of the
terms of Executive’s employment by the Company and may not be contradicted by
evidence of any prior or contemporaneous statements or agreements, except for
agreements specifically referenced herein (including the Executive Proprietary
Information and Inventions Agreement attached as Exhibit B and the Arbitration
Agreement attached as Exhibit C).  To the extent that the practices,
policies or procedures of the Company, now or in the future, apply to Executive
and are inconsistent with the terms of this Agreement, the provisions of this
Agreement shall control. Any subsequent change in Executive’s duties, position,
or compensation will not affect the validity or scope of this
Agreement.

     

    20.
Executive Acknowledgement

     

    EXECUTIVE
ACKNOWLEDGES EXECUTIVE HAS HAD THE OPPORTUNITY TO CONSULT LEGAL COUNSEL
CONCERNING THIS AGREEMENT, THAT EXECUTIVE HAS READ AND UNDERSTANDS THE
AGREEMENT, THAT EXECUTIVE IS FULLY AWARE OF ITS LEGAL EFFECT, AND THAT EXECUTIVE
HAS ENTERED INTO IT FREELY BASED ON EXECUTIVE’S OWN JUDGMENT AND NOT ON ANY
REPRESENTATIONS OR PROMISES OTHER THAN THOSE CONTAINED IN THIS
AGREEMENT.

     


    
      
         


      

      
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    IN WITNESS WHEREOF, the
parties have duly executed this Agreement as of the date first written
above.

     

    
      
        	 	SUNBURST
      ACQUISITIONS III, INC.:	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Scott
      Mac Caughern	 
	 	 	Scott
      Mac Caughern	 
	 	 	Director	 
	 	 	 	 


      

    

     

    
      
        	 	EXECUTIVE:	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Richard
      McKilligan	 
	 	 	Richard
      McKilligan	 
	 	 	 	 
	 	 	 	 


      

    

    
 

    
      
         

      

      
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    EXHIBIT
A

     

    PERCIPIO BIOTHERAPEUTICS,
INC.

     

    TERMINATION
CERTIFICATION

     

    This is
to certify that I do not have in my possession, nor have I failed to return, any
devices, records, data, notes, reports, proposals, lists, correspondence,
specifications, drawings, blueprints, sketches, materials, equipment, other
documents or property, or reproductions of any aforementioned items belonging to
Percipio Biotherapeutics, Inc., its subsidiaries, affiliates, successors or
assigns (together, the “Company”).

     

    I further
certify that I have complied with all the terms of the Company's Proprietary
Information and Inventions Agreement signed by me, including the reporting of
any inventions and original works of authorship (as defined therein), conceived
or made by me (solely or jointly with others) covered by that
agreement.

     

    I further
agree that, in compliance with the Proprietary Information and Inventions
Agreement, I will preserve as confidential all trade secrets, confidential
knowledge, data or other proprietary information relating to products,
processes, know-how, designs, formulas, developmental or experimental work,
computer programs, data bases, other original works of authorship, customer
lists, business plans, financial information or other subject matter pertaining
to any business of the Company or any of its employees, clients, consultants or
licensees.

     

    I further
agree that for twelve (12) months from this date, I will not hire any employees
of the Company and I will not solicit, induce, recruit or encourage any of the
Company's employees to leave their employment.

     

    Date:
______________________

     

    
 

    (Employee's
Signature)

     

     

    (Type/Print
Employee's Name)

    
 

     

     

     

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